These days, it cannot be denied that there are a lot of people who are experiencing financial issues. This is the main reason why there are many who are opting for payday loans, especially in the United States. Before, availing payday loans is just very easy to the people in the United States, but not until the Consumer Financial Protection Bureau (CFPB) announced the new sets or rules regarding these loans. Through the aid of Chicago Tribune, the new rules have been revealed to the people in the US.
For you to know, the Consumer Financial Protection Bureau is a government independent agency in the United States of America that provides consumer protection when it comes to financial matters, especially when it comes to loans. The said agency found out that the people who avail payday loans can be trapped in a considerable amount of fees, which can put them in a very difficult financial situation. Moreover, based on the studies that the agency has conducted, it was found out that 80 percent of those borrowers are repeat loaners. There is around 45 percent of these payday loaners who availed 4 or more loans consecutively. This is the main reason why new sets of rules have been initiated not only for the benefit of the borrowers, but also for those loan providers out there.
Knowing More About the New Rules
Payday loan providers are required by the CFPB to take into account the finances of the borrowers first before letting them avail payday loans and some other short-term loans that fit for them. It is very important that the loan providers know exactly that their borrowers can afford the loans that they are availing. Even so, those loaners out there who will have less than $500 loaned amount are exempted for this new rule. It also exempts those loans that have less than 36% of interest rates.
People are still allowed to have repeat loans. Nevertheless, there is a twist here that you should know. Right after your third time of availing the payday loan, you will be required not to avail the loan again for 30 days or one month. It is actually called a cooling-off period, which is a mandatory thing. And for those who will avail payday loan that has lesser than $500 as a loaned amount, you still need to pay part of your debt before you will be allowed to roll over the loan.